The Financial Conduct Authority (FCA) has a pivotal role when it comes to the granting of consumer credit to individuals. Principally, it is an organisation which regulates lenders, their agreements and everything to do with credit. Its tentacles are spread far and wide. But first and foremost, its regulations focus on the protection of the hapless “customer”, or individuals, to whom credit is granted.

The new “consumer duty” is the latest manifestation of this. Anyone involved with credit lending will be familiar the FCA’s Handbook which details (amongst other topics) High Level Standards, Regulatory Processes, Redress, and a plethora of guides and guidance. Not least amongst these is the “Consumer Credit Sourcebook”, which is the specialist sourcebook for credit related activities.

So we are no doubt all alarmed to learn that the FCA is under attack from scammers who are impersonating the authority. This is perhaps no surprise when one considers that last year, it was reported that, in the UK, a staggering 41 million people were targeted by bogus calls, texts and e-mails. According to the bank industry group, UK Finance, this equates to £2,300 per minute, or £1.2 billion lost to fraud.

In a report from the BBC (30 August 2023), “Thousands of Scammers Impersonate Finance Watchdog”, it appears that the regulator has been subject to a huge number of cheats pretending to be the regulator. These fraudsters ask individuals for their financial details such as their bank account particulars, including PINs and passwords. The incentive to pass on this information is the likelihood that the individual will receive compensation for some fictitious calumny committed by a regulated credit provider. The bank details are needed, of course, to facilitate payment of the fictitious compensation.

The FCA has given sage advice should anyone be contacted offering compensation by an organisation claiming to be the authority, including:

  • The FCA will never contact people asking them for their bank details.
  • If someone receives a call, text or e-mail claiming to be from the authority suggesting that they are entitled to compensation, then, if called, they should hang up the phone or ignore any other type of communication.
  • Concerned individuals can contact the authority by phone. For readers' information, I called the number quoted by the BBC. It is not a dedicated fraud reporting number having the usual plethora of choices available to the caller. I have no idea which option will take a concerned individual to a person who can deal with the enquiry.
  • Often, tell-tale signs of impersonation include a text or e-mail containing poor spelling or grammar. Presumably, the more savvy and alert consumer will be aware of this.

Perhaps the greatest protection will come once the UK introduces a ban on the cold-calling of all consumer and financial service products. The Government has said that such a blanket ban on cold-calls will cover legitimate calls too. The precise products to be covered by the ban will be decided upon after consultation. An advertising campaign will be introduced to warn people about the risk of scams and a new fraud squad established with 500 staff, up from the current 120.

At the risk of being cynical, devious fraudsters may still be able to find some way of navigating  around such obstacles, particularly if they say that are an offshore company offering some lucrative returns on an investment. These offshore scammers will be outwith the jurisdiction of the FCA and also, quite likely, the UK courts.

One wonders, with one in 15 people in the UK falling victim to fraud, whether the ban will be “too little too late”.